In a world first, Iceland recently proposed a bill to mandate equal pay in both the public and private sectors, regardless of gender, ethnicity, sexuality, or nationality.
If it passes — and many officials believe it will — the law would require companies to issue regular staff surveys to reveal any lingering disparities between people’s salaries.
The most talked-about aspect of the law is its proposed effects on Iceland’s gender wage gap. Unlike the other Nordic nations, Iceland’s gap of 17% (the same as the US) falls above the OECD average of 15%. Most Nordic countries sit comfortably below.
The country hopes its policy will have the same effect that similar, albeit less thorough, versions have had in the surrounding Nordic countries. In some form or another, Sweden, Finland, Denmark, and Norway all require companies to issue surveys that root out discrepancies in men and women’s pay.
Corporate auditing has proven to be been a successful method for Nordic nations hoping to promote equality. According to the 2016 Global Gender Gap Index, the four highest-performing countries were Iceland, Finland, Norway, and Sweden. (Denmark, due to low rates of women in senior management roles, fell at 19th.)
Asa Regner, Sweden’s minister for gender equality, told Business Insider that the country’s 2008 Swedish Discrimination Act helped provide a strong system of accountability for equal pay. Like Iceland’s new law, Sweden’s policy requires all companies of 25 or more employees to collect data once per year, which the government reviews.
Companies with big pay gaps between genders — and which don’t take steps to close those gaps — risk paying fines.
Thorstein Viglundsson, Iceland’s minister of social affairs and equality, says the country is fully capable of closing its pay gap.
“The gender pay gap is unfortunately a fact in the Icelandic labour market and it’s time take radical measures,” he told The Guardian. “We have the knowledge and the processes to eliminate it.”
As Nordic gender-equality ministers discussed at a recent UN summit, one lingering challenge for these nations is agreeing whether “equal pay” is defined by men and women doing the same exact jobs, and receiving equal pay for them, or receiving equal opportunities to fill jobs that may pay more or less depending on the labour market.
Swedish Minister Regner, for her part, says the goal should be to guide more men toward traditionally “female” roles and vice versa for women. Her government has directed money toward those industries, such as nursing and elderly care, to help roles often filled by women gain greater standing in society.
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